I would agree with Airk that these practices are ultimately self-defeating. They happen, not because it’s really good business sense, but because companies tend to follow the easy path.
Because of the way Accounting works as a discipline, businesses tend to think of assets as being either physical goods, or financial instruments of some kind. In creative fields, these are almost entirely worthless. Your most valuable asset - maybe the only valuable asset - is your talent pool.
Cash burns suprisingly quickly. Intellectual property can be replaced in one-two business cycles or obsoleted by the competition. Your office and computer equipment won’t be worth much in the bankruptcy, either. So protect the talent. Make sure they can perform at their best for the long term, and give them every opportunity to do so. Very likely, this will involve reining them in now and again.
Second, as far as it goes, protect your IP. I just it wasn’t worth as much as talent, because it isn’t. But well-recognized IP allows you a big leg up in launching a product. Protecting it, in this case, involves two somewhat opposed ideas. You need to avoid having really bad products, so if if something is really quite bad it may be better to kill the project rather than go forward. Second, you need to push the design and experiment a bit to keep it from getting stale. It’s often a good idea to do this in side games or small semi-indie projects; you test mechanics and then bring them into the main series in a mature form.
Additionally, it’s a terrible idea to run IP into the ground. Just don’t do that.
And growth is totally a good thing - but you need to manage it carefully.
Exactly! You shouldn’t be setting “growth targets” or getting attached to some sort of MBA-style “A company needs to grow X% each year or…” stuff. If your company is making good products, then you can easily grow gently and organically. Hire people to fill a need that you have discovered in your process. Maintain a good ratio of senior people to junior people (ideally, MORE of the former than the latter!) and foster an environment where the latter become the former by working with them, rather than because the former leave.
One of the stupidest problems I’ve had regarding stuff from “answering my government’s polls on Small And Medium Companies” to “getting third-party insurance” or even “doing my taxes” involves that kind of thing. How can I have a business when I don’t buy any merchandise? Same way as cabbies and lawyers do, but for some reason the people who designed the poll never realized that cabbies and lawyers are often set up as exactly the same type of Small Company as I am, therefore “0” was not an acceptable answer to the question “how much did you spend on merchandise last fiscal year”. And hey, “IT consultant” may be a newish profession, but lawyers were already around by the time Romulus killed Remus.
In the end a lot of the problems with a bad gaming company often are the same that can be seen in a bad gizmo-making company or a bad construction company or a bad any kind of company. Many companies do not see the cost of internal training, for example, so they’ll hire new people every three months and not realize that by the time the new batch is trained you’re already signing up the next batch. Treating your people as disposable also leads to bad safety practices: those hyper-long days are a safety issue.
Years ago (2011 IIRC), I met someone who directed the local Project Management Masters at a university. He mentioned I might find it of interest; I said “I looked into it, but as far as I could tell it was all about budgetting and controlling the budget.” “Well, yes!” “In the kind of projects where I work, at least 99% of the problems come from Human Resources, so call me up once you guys have included that.” There are other fields where Human Resources isn’t so evidently the main asset (only because a bunch of corporate slogans say it is, doesn’t make it untrue), but even in those? OK, so you’re an electrical company with billions in physical assets and you’re building a new transformer center for a subdivision. Are you sure you want the electricians to be badly trained, overworked and taking every shortcut they can find?